Pallav Nadhani is the co-founder and CEO of FusionCharts. He started FusionCharts at the age of 17 without any external funding. Today, FusionCharts has over 28,000 customers and 750,000 developers. His entrepreneurial journey has been covered by various magazines like Forbes, Entrepreneur, Business Today, Economic Times and numerous blogs and websites.
Pallav holds an MS in Computer Science from the University of Edinburgh, UK. He has co-authored a book on combining the power of Flash and .NET called ‘Flash.NET’ in 2002 and has written several technical articles for international journals ever since.
“The primary reasons why startups fail are – building the wrong product for the market (no Product-market fit), not figuring out distribution/sales channels, and over-spending (bad unit economics) across my portfolio.”
Read on to know more about Pallav Nadhani, his entrepreneurial journey, his investment strategy, and how he bootstrapped his way to success.
What background and domain expertise do you have? What makes you turn into an investor?
Pallav Nadhani: I’m an entrepreneur first. I started building my first company at 16 – FusionCharts, which I’m still running now (for the last 18 years). While I bootstrapped FusionCharts and didn’t raise money for my venture, I realized that many other companies can make use of seed capital – which is how I started investing.
Right after being an investor like in early days, there must be some tough times in building up the first fund along with building up a second fund or giving back the good returns to those LPs, If there is any similar tough time like this, please tell me more about it and how you (or your team) overcome the difficult times.
Pallav Nadhani: I was investing my personal money and didn’t raise a fund.
As an investor, what kind of startups have you invested in? How did you find those startups to invest in?
Pallav Nadhani: I’ve done investments across B2B Global SaaS (security, cloud telephony, agri-tech, cloud-tech, ed-tech, marketing automation), B2C India (health, e-commerce, media, mobility startup), and a couple of accelerators.
What would be the core factors that you decide “Not” to invest in certain companies?
Pallav Nadhani: I do NOT invest in capital heavy companies and non-IP driven companies.
What would be the KPI that you usually check about the startups’ growth? It may diverse in each industry like LTV, CAC, MoM etc. but would be helpful to understand more about your additional investment factors.
Pallav Nadhani: The primary factor I now track is market size, and LTV/CAC ratio. In addition, can that market be sold to, from India and what is the India advantage the company has.
What is the investment range and In a typical year, how many startups do you invest in? Do overseas headquartered startups have a chance to get investment from you or should be headquartered in certain countries?
Pallav Nadhani: Overall, I’ve done 25 investments starting 2011. Of late, I’ve slowed down a bit with just 2-3 investments per year. The companies can be headquartered anywhere.
What are the main factors that startups fail as per your experience “after” getting investment and how can they prevent mistakes in advance from your personal perspective?
Pallav Nadhani: The primary reasons I’ve seen are – building the wrong product for the market (no Product-market fit), not figuring out distribution/sales channels, and over-spending (bad unit economics) across my portfolio.
What’s your advice to entrepreneurs who have a chance to meet investors like you? and What are the top 3 questions that you always ask the founders?
Pallav Nadhani: Know your market (size, problem), how are you different (better), and what’s your advantage (why you)
What’s your general thought about the term “Global” and What are the important factors (criteria) for local startups to consider an international expansion?
Pallav Nadhani: For me, global is the world. The important factors are great product, clear positioning/messaging, and a good GTM process.
As you know, our company name is “beSUCCESS”, what’s your definition of the term “success” as an investor or as an individual human being?
Pallav Nadhani: Constantly doing things that matter to customers, and keep me creative (always learning).
What are the one or two things that you would do differently if you could go back to 10 years ago?
Pallav Nadhani: From an investor’s perspective, know the market forces better, and add more force multipliers early to the startups I invested in.